Adjusting Imports of Automobiles and Automobile Parts Into the United States, 23433-23435 [2019-10774]

Agencies

• Executive Office of the President

[Federal Register Volume 84, Number 98 (Tuesday, May 21, 2019)]
[Presidential Documents]
[Pages 23433-23435]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10774]



[[Page 23431]]

Vol. 84

Tuesday,

No. 98

May 21, 2019

Part V





The President





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Proclamation 9888--Adjusting Imports of Automobiles and Automobile 
Parts Into the United States



Notice of May 20, 2019--Continuation of the National Emergency With 
Respect to the Stabilization of Iraq


                        Presidential Documents 



Federal Register / Vol. 84 , No. 98 / Tuesday, May 21, 2019 / 
Presidential Documents

___________________________________________________________________

Title 3--
The President

[[Page 23433]]

                Proclamation 9888 of May 17, 2019

                
Adjusting Imports of Automobiles and Automobile 
                Parts Into the United States

                By the President of the United States of America

                A Proclamation

                1. On February 17, 2019, the Secretary of Commerce 
                (Secretary) transmitted to me a report on his 
                investigation into the effects of imports of passenger 
                vehicles (sedans, sport utility vehicles, crossover 
                utility vehicles, minivans, and cargo vans) and light 
                trucks (collectively ``automobiles'') and certain 
                automobile parts (engines and engine parts, 
                transmissions and powertrain parts, and electrical 
                components) on the national security of the United 
                States under section 232 of the Trade Expansion Act of 
                1962, as amended (19 U.S.C. 1862).

                2. The report found that automotive research and 
                development (R&D) is critical to national security. The 
                rapid application of commercial breakthroughs in 
                automobile technology is necessary for the United 
                States to retain competitive military advantage and 
                meet new defense requirements. Important innovations 
                are occurring in the areas of engine and powertrain 
                technology, electrification, lightweighting, advanced 
                connectivity, and autonomous driving. The United States 
                defense industrial base depends on the American-owned 
                automotive sector for the development of technologies 
                that are essential to maintaining our military 
                superiority.

                3. Thus, the Secretary found that American-owned 
                automotive R&D and manufacturing are vital to national 
                security. Yet, increases in imports of automobiles and 
                automobile parts, combined with other circumstances, 
                have over the past three decades given foreign-owned 
                producers a competitive advantage over American-owned 
                producers.

                4. American-owned producers' share of the domestic 
                automobile market has contracted sharply, declining 
                from 67 percent (10.5 million units produced and sold 
                in the United States) in 1985 to 22 percent (3.7 
                million units produced and sold in the United States) 
                in 2017. During the same time period, the volume of 
                imports nearly doubled, from 4.6 million units to 8.3 
                million units. In 2017, the United States imported over 
                191 billion dollars' worth of automobiles.

                5. Furthermore, one circumstance exacerbating the 
                effects of such imports is that protected foreign 
                markets, like those in the European Union and Japan, 
                impose significant barriers to automotive imports from 
                the United States, severely disadvantaging American-
                owned producers and preventing them from developing 
                alternative sources of revenue for R&D in the face of 
                declining domestic sales. American-owned producers' 
                share of the global automobile market fell from 36 
                percent in 1995 to just 12 percent in 2017, reducing 
                American-owned producers' ability to fund necessary 
                R&D.

                6. Because ``[d]efense purchases alone are not 
                sufficient to support . . . R&D in key automotive 
                technologies,'' the Secretary found that ``American-
                owned automobile and automobile parts manufacturers 
                must have a robust presence in the U.S. commercial 
                market'' and that American innovation capacity ``is now 
                at serious risk as imports continue to displace 
                American-owned production.'' Sales revenue enables R&D 
                expenditures that are necessary for long-term 
                automotive technological superiority, and automotive

[[Page 23434]]

                technological superiority is essential for the national 
                defense. The lag in R&D expenditures by American-owned 
                producers is weakening innovation and, accordingly, 
                threatening to impair our national security.

                7. In light of all of these factors, domestic 
                conditions of competition must be improved by reducing 
                imports. American-owned producers must be able to 
                increase R&D expenditures to ensure technological 
                leadership that can meet national defense requirements.

                8. The Secretary found and advised me of his opinion 
                that automobiles and certain automobile parts are being 
                imported into the United States in such quantities and 
                under such circumstances as to threaten to impair the 
                national security of the United States. The Secretary 
                found that these imports are ``weakening our internal 
                economy'' and that ``[t]he contraction of the American-
                owned automotive industry, if continued, will 
                significantly impede the United States' ability to 
                develop technologically advanced products that are 
                essential to our ability to maintain technological 
                superiority to meet defense requirements and cost 
                effective global power projection.''

                9. The Secretary therefore concluded that the present 
                quantities and circumstances of automobile and certain 
                automobile parts imports threaten to impair the 
                national security as defined in section 232 of the 
                Trade Expansion Act of 1962, as amended.

                10. In reaching this conclusion, the Secretary 
                considered the extent to which import penetration has 
                displaced American-owned production, the close 
                relationship between economic welfare and national 
                security, see 19 U.S.C. 1862(d), the expected effect of 
                the recently negotiated United States-Mexico-Canada 
                Agreement (USMCA), and what would happen should the 
                United States experience another economic downturn 
                comparable to the 2009 recession.

                11. In light of the report's findings, the Secretary 
                recommended actions to adjust automotive imports so 
                that they will not threaten to impair the national 
                security. One recommendation was to pursue negotiations 
                to obtain agreements that address the threatened 
                impairment of national security. In the Secretary's 
                judgment, successful negotiations could allow American-
                owned automobile producers to achieve long-term 
                economic viability and increase R&D spending to develop 
                cutting-edge technologies that are critical to the 
                defense industry.

                12. I concur in the Secretary's finding that 
                automobiles and certain automobile parts are being 
                imported into the United States in such quantities and 
                under such circumstances as to threaten to impair the 
                national security of the United States, and I have 
                considered his recommendations.

                13. I have also considered the renegotiated United 
                States-Korea Agreement and the recently signed USMCA, 
                which, when implemented, could help to address the 
                threatened impairment of national security found by the 
                Secretary.

                14. Section 232 of the Trade Expansion Act of 1962, as 
                amended, authorizes the President to take action to 
                adjust the imports of an article and its derivatives 
                that are being imported into the United States in such 
                quantities or under such circumstances as to threaten 
                to impair the national security. If that action is the 
                negotiation of an agreement contemplated in 19 U.S.C. 
                1862(c)(3)(A)(i), and such an agreement is not entered 
                into within 180 days of the proclamation or is not 
                being carried out or is ineffective, then the statute 
                authorizes the President to take other actions he deems 
                necessary to adjust imports and eliminate the threat 
                that the imported article poses to national security. 
                See 19 U.S.C. 1862(c)(3)(A).

                15. I have decided to direct the United States Trade 
                Representative (Trade Representative) to pursue 
                negotiation of agreements contemplated in 19 U.S.C. 
                1862(c)(3)(A)(i) to address the threatened impairment 
                of the national security with respect to imported 
                automobiles and certain automobile parts from the 
                European Union, Japan, and any other country the Trade 
                Representative deems appropriate, and to update me on 
                the progress of such negotiations

[[Page 23435]]

                within 180 days. Under current circumstances, this 
                action is necessary and appropriate to remove the 
                threatened impairment of the national security.

                NOW, THEREFORE, I, DONALD J. TRUMP, President of the 
                United States of America, by the authority vested in me 
                by the Constitution and the laws of the United States 
                of America, including section 301 of title 3, United 
                States Code, and section 232 of the Trade Expansion Act 
                of 1962, as amended, do hereby proclaim as follows:

                    (1) The Trade Representative, in consultation with 
                the Secretary, the Secretary of the Treasury, and any 
                other senior executive branch officials the Trade 
                Representative deems appropriate, shall pursue 
                negotiation of agreements contemplated in 19 U.S.C. 
                1862(c)(3)(A)(i) to address the threatened impairment 
                of the national security with respect to imported 
                automobiles and certain automobile parts from the 
                European Union, Japan, and any other country the Trade 
                Representative deems appropriate.
                    (2) Within 180 days of the date of this 
                proclamation, the Trade Representative shall update me 
                on the outcome of the negotiations directed under 
                clause (1) of this proclamation.
                    (3) The Secretary shall continue to monitor imports 
                of automobiles and certain automobile parts and shall, 
                from time to time, in consultation with any senior 
                executive branch officials the Secretary deems 
                appropriate, review the status of such imports with 
                respect to the national security. The Secretary shall 
                inform the President of any circumstances that in the 
                Secretary's opinion might indicate the need for further 
                action by the President under section 232 of the Trade 
                Expansion Act of 1962, as amended.
                    (4) Any provision of previous proclamations and 
                Executive Orders that is inconsistent with the actions 
                taken in this proclamation is superseded to the extent 
                of such inconsistency.

                IN WITNESS WHEREOF, I have hereunto set my hand this 
                seventeenth day of May, in the year of our Lord two 
                thousand nineteen, and of the Independence of the 
                United States of America the two hundred and forty-
                third.
                
                
                    (Presidential Sig.)

[FR Doc. 2019-10774
Filed 5-20-19; 11:15 am]
Billing code 3295-F9-P